High cost of health insurance got your small-business budget in a bunch? AgriPlan/BizPlan, a tax reduction service based in Adel, Iowa, estimates that in 1995, 40,000 self-employed business owners each saved an additional $1,800 in taxes through a provision in the Internal Revenue tax code.

The deduction, under IRS Tax Code Section 105, applies to married, self-employed taxpayers who formally hire their spouses as employees. If your spouse receives a salary for services performed for your business--even if he or she holds another job elsewhere--you can deduct 100 percent of your family's health-insurance premiums and non-insured medical expenses.

But be forewarned: the deduction is recommended for businesses with three or fewer employees, because the law requires employers to include all employees in the plan. For businesses with more than three employees, the cost of including them all may outweigh the savings benefits of the deduction.

"This plan works best for companies with one to three employees," says president Phillip Harrington, "because even if you are covering their expenses, it will still be to your benefit. If you have 20 employees, you could still use the Section 105 deduction, but quite frankly, you're better off getting a cafeteria plan like most larger companies do. The Section 105 deduction is truly meant for the mom and pop operation."

AgriPlan/BizPlan will act as a third party administrator--setting up a Section 105 deduction plan to comply with IRS, Department of Labor and Employee Retirement Income Security Act (ERISA) regulations--for $175 per year. "We don't prepare taxes, we don't sell insurance programs--all we do is administer Section 105 deductions," says Harrington. "And because we're national, we can do it inexpensively."

All plans are backed with an audit guarantee. If you think your small business might qualify for this little-known deduction, talk to your accountant. You can also contact AgriPlan/BizPlan directly at (800) 298-2923, or write to P.O. Box 267, Adel, IA 50003.

A Daily Dose

Even during your busiest days, you'll still be able to find a glimmer of guidance from a voice of experience in A Goal is a Dream with a Deadline: Extraordinary Wisdom for Entrepreneurs, Managers, and Other Smart People (McGraw-Hill, $12.95, 800-338-3987), by Leo Helzel & Friends.

Helzel, who has taught entrepreneurship courses for more than 25 years at the University of California at Berkeley, and more than 80 of his friends and business associaties, provide 401 entrepreneurial adages and enlightening witticisms for quick reading and easy digestion. Here's a sampling of the pithy prose:

"An idea without at least some element of absurdity is probably not worth further consideration," "A genius is often a crackpot who hits the jackpot," and finally, "Entrepreneurs are the backbone of the future economy. They are often treated as the tailbone, particularly in the start-up phase. It's the price of entry."

Hot Product Contest

If you've been waiting for your product to hit it big, be
sure to enter the National Mail Order Association's "US
500" contest. If it's one of the 500 products chosen, it
may be seen by mail order, catalog and infomercial companies, as
well as other direct marketers. "The products we select will
be exposed to hundreds of merchandise buyers from around the world,
adding export possibilities as a bonus," says John Schulte,
chief manager of the NMOA.

All 500 selected products will enjoy free publicity in
"Mail Order Digest," the association's newsletter.
The best product from each state will also be featured on the NMOA
Web site (http://www.nmoa.org)
for an entire year.

Completed entries must be submitted no later than December 31,
1996. To receive an entry form, call the NMOA at (612) 788-1673, or
write to 2807 Polk St. NE, Minneapolis, MN 55418-2954.

O&A

Answers to your small business questions

Q:We've recently opened a full-service nail
salon, emphasizing pretty hands and feet. Our plan is to enter the
market with strategically placed boutique-like salons. Can you
direct us to market research in this area?

Ellen Brown

Grand Rapids, Michigan

A:Provided by Cyndy Drummey, publisher of
NAILSMagazine.

If at first you do succeed, try and try again. However, opening
a second salon is not as simple as copying what works in one place
to a new location. There is much to be learned from the mistakes
and successes you had in your first salon. If you intend to open a
series of boutique-type salons, you should try to standardize as
much of your business management as you can so that all your stores
operate similarly. This will make all your choices--from lease
arrangements to staffing to decor--much simpler.

Studying the demographics of your expansion areas is critical.
You will need to understand traffic patterns and average family
incomes in the area. Do you have enough clients from your existing
client base to get a new location started? Will you be able to
support your current mix of services in the new area? Will some of
your present staff be able to assist at the new location or will
you need to hire and train new staff members?

Also, do you have a strong relationship with your product
distributor? Your distributor can be a tremendous resource, not
just for product buying, but for understanding salon patterns in
other areas, learning about special discounts on equipment or
custom design, and introducing you to other salon owners. A
distributor knows that as your business expands, your business with
her will also expand--she will usually do what she can to help you
be successful.

There are several industry resources that can help with the
specifics. The Nails Industry Association is a professional
association for nail technicians and owners. They offer liability
insurance, a subscription to NailsMagazine, trade
show discounts, and a continuing education program (which addresses
salon-owner issues), among other benefits. For information, call
(800) 84-NAILS.

The Salon Association is a trade association for salon owners.
They have stricter membership requirements (based on salon size),
but offer a wealth of resources for owners, including books, health
insurance, advanced education and networking opportunities. Call
(800) 211-4TSA.

There are salon consultants who specialize in the needs of
owners. NAILS has worked with several of them on a variety
of projects. A couple of recommendations: Marketing Solutions,
(703) 968-0400; Salon Development Corp., (800) 334-7198; and Salon
Dynamics Inc., (303) 691-0285.

Subscriptions to NAILSMagazine are available for
$38, and can be ordered by calling (310) 376-8788.

Q:I want to begin researching a bar/restaurant, but I
don't know where to begin. Do you have any suggestions?

Brian J. Sweeney

New York, New York

A: As a matter of fact, we've written the book on
it--or at least our Business Products division has. Business
Start-Up Guides #1186: Bar/Tavern and #1279: Starting A
Restaurant will walk you through the steps to opening and
operating a bar or restaurant, obtaining health department permits,
and keeping track of inventory. The resource appendixes contain a
wealth of information sources, including trade associations,
publications and suppliers. For more information about our business
guides, see page 97.

You can also check out Gale's Small Business
Sourcebook in the reference section of your local library. It
has separate entries for Bar/Cocktail Lounge and Restaurant, and
lists pages of information sources like associations and other
organizations, educational programs and suppliers.

The National Restaurant Association, for example, publishes A
Guide to Preparing a Restaurant Business Plan for $40 ($20 to
members), as well as Restaurants USA, a monthly magazine
covering the restaurant industry. To order either of these
publications or for information about membership, call (800)
424-5156 or write to 1200 17th St. NW, Washington, DC
20036-3097.

Nation's Restaurant News is a weekly magazine which
caters to the food service industry. Subscriptions are available
for $34.50. To order, call (800) 447-7133.

Address your small-business questions to: Q&A, Business
Start-Ups, 2445 McCabe Way, Irvine, CA 92614, or e-mail them to
76711.1724@compuserve.com or
BSUMag@AOL.COM. Due to limited
space, time and resources, we can answer only those Q&A letters
chosen for publication. Questions may be edited for clarity.

Hot To Buy Hot To Sell

By Deborah Richman

New products for small and homebased businesses.

Total Recall

It's not always convenient to stop and write yourself a
memo. Total Recall lets you make notes to yourself--anytime,
anywhere. Total Recall is a 3.1 ounce voice recorder with up to 23
minutes of recording time. A unique editing function lets you
insert and delete recorded material and organize your thoughts into
categories without recording over other data.

The device will also remind you of the most important memos; you
can set the alarm to play a specific memo at a predetermined day
and time, up to one year in advance.

As you record each message, it's automatically dated and
time-stamped. The LCD display window allows you to pull up files by
date and time. The Total Recall also features a clock, a wake-up
alarm, and an earphone jack for private listening. The device runs
on two AAA batteries and a lithium battery.

Trademark Quest

Perfect for the entrepreneur: Trademark Quest is a CD-ROM
program that lets you screen a potential new name for your business
or product, protect your registered trademark from infringement,
and monitor a competitor's trademark. The program also helps to
generate new ideas for brand and corporate names, and print an
order to obtain copies of trademarks from the U.S. Patent and
Trademark Office. With Trademark Quest, you can learn how to file
and protect a trademark or brand, as well as how to trademark an
Internet domain name.

The program's database features over 750,000 registered
trademarks; quarterly updates on floppy disk are available at an
additional charge. The program comes with a 24-page user guide and
a free 48-page book on how to trademark an Internet name.

Classic Timepiece

The ultimate blend of form and function, the Classic ArtWatch is
a hot seller this year in stores and catalogs. The faces of the
Classic ArtWatches feature miniaturized replications of famous
works of art by the world's master painters, such as Dali,
Monet, Van Gogh and Picasso.

There are 60 designs to choose from, and all styles are
available in a three-Micron gold- or silver-plated case, and come
with either a sleek leather, braided leather or genuine lizard-skin
strap (available in various colors). Each watch has a Japanese
quartz analog movement, a three-year warranty, an art-history
insert, an ArtWatch string tag, and a collectible tin box.

Super Backpack

Sell this in your sporting goods store, to the local Boy Scout
troop, or even as a sideline to your travel or tour agency. The
Super Backpack converts into a seat when you unfold the attached
metal X-frame seat from the backpack.

The green, red or black nylon backpack is water-resistant and
easily detaches from the metal frame. The backpack features two
side pockets, as well as a front pocket. The product is also very
light, weighing only three pounds.